The WTO has reportedly decided whether it will approve tariffs on European goods headed to the U.S. and is set to make an announcement soon. Until then, importers are accelerating purchasing schedules in order stock up on Spanish oils.
Spanish olive oil exports to the United States increased by 40 percent in the first half of 2019, according to data from Spain’s customs agency.
The large increase in exports has been attributed to low prices in Spain and the prospect of impending tariffs, which has caused buyers to stock up on Spanish oils in the U.S.
Some companies have accelerated purchasing schedules as a temporary hedge against potential tariffs.- Joseph R Profaci, executive director of NAOOA
“Some companies have accelerated purchasing schedules as a temporary hedge against potential tariffs,” Joseph R Profaci, the executive director of the North American Olive Oil Association (NAOOA), told Olive Oil Times.
Since January, Spanish producers have exported about $296 million of olive oil to the U.S., an increase of $32 million compared with the same period last year. Spurred on by these increased sales and helped by a poor harvest across the rest of the Mediterranean, some in Spain expect exports to hit a record high this year, exceeding 1.1 million tons for the first time.
See Also:Olive Oil Trade NewsAntonio Luque, the president of Spain’s largest olive oil cooperative, DCoop, also thinks the spike in demand for Spanish oil in the U.S. is being driven by fears of massive price increases, according to El Pais. These price hikes will come to fruition if the World Trade Organization approves a 100 percent tariff placed on hundreds of different goods exported from the European Union to the U.S., including olive oil and four types of table olives.
The WTO has reportedly made its decision on whether or not it will approve the $15 billion worth of tariffs and will announce its decision soon. If the tariffs are approved, olive oil prices in the U.S. may double or even triple, according to Profaci.
Increases this substantial would likely price many Spanish olive oils out of the U.S. market. This has producers in the province of Córdoba especially concerned. In the current crop year, the second-largest olive oil-producing province in Spain has exported nearly 71,000 tons of olive oil to the U.S., which represents 22 percent of the province’s total olive oil exports.
Italy is the only destination to which Córdoban producers sell more olive oil, with 40 percent of exports heading to the world’s largest olive oil importer this crop year. However, a portion of that olive oil is blended with other oils and then re-exported to the U.S.
The Italian Association of the Olive Oil Industry (Assitol) has already warned that Italian producers could lose $200 million each year if the tariffs are approved. Blended Italian oils would be among those which would cost more in the U.S. and therefore be exported less, which may further cut demand for Córdoban oil.
If the tariffs are approved, many producers in Córdoba, along with the rest of Spain, are unsure where else they will be able to sell their olive oil. However, until the WTO makes its decision, all these producers can do it wait and see.
More articles on: import/export, Spain, tariffs
Dec. 18, 2023
Reflections on 45 Years Championing Italian Olive Oil in America
Nearly half of a century after a chance encounter with an Italian olive oil producer, John J. Profaci looks back on his role in the American market.
Apr. 3, 2024
Nurseries in Spain Are Running Low on Olive Tree Seedlings
High olive oil prices at origin, interest from private equity and farmers seeking to shift away from more water-intensive crops are fueling the shortages.
Mar. 13, 2024
How an Olive Oil Lover Found Success in The US Market
After discovering her passion for extra virgin olive oil in Crete, Joanne Lacina built a successful importing and online retail business in the U.S.
Jul. 31, 2023
Concerns Mount Over Olive Oil Shortage in Spain
With olive oil stocks expected to run out by the start of the coming harvest and predictions of another low yield, experts anticipate prices to continue rising.
Apr. 11, 2024
Turkish Producers Pray Export Ban Ends with Ramadan
While the prohibition on bulk exports has helped control domestic prices, producers worry it has hurt their credibility with international partners.
Feb. 5, 2024
Agricultural Groups Call on Spanish Government to Step Up Climate Change Response
Climate and agricultural advocates seek funding for insurance and investments in water-saving infrastructure.
Jun. 10, 2024
U.S. Sees Significant Growth in Organic Olive Oil Sales
In the past two years, organic olive oil sales in the U.S. have increased by ten percent while conventional extra virgin olive oil sales slipped.
Jan. 18, 2024
Controlling Black Scale in California Groves
While the invasive insect does not impact oil quality, heavy infestations can reduce olive yields. The pest is expected to spread as California’s winters become milder.